NZ Centre for Political Research

When is someone going to campaign for NZ's ETS to be suspended?

It is an appalling scheme - such a dreadful waste of money. It needs to be scrapped when Kyoto expires at the end of the year.

If the public allows it to carry on, it will expose just how weak we all are!

Taxpayers face big bill - forestry companies
http://www.radionz.co.nz/news/political ... -companies

Forestry companies say taxpayers will be lumped with a bill of hundreds of millions of dollars if the Government commits to the second phase of the Kyoto Protocol.

That's because a rule which prevents New Zealand having to pay for carbon from forestry from 1990 - 2008 has been removed for the next phase, which is expected to start next year.

That would mean having to backpay 18 years worth of forestry emissions.

Two forestry companies, Earnslaw One, and City Forests, say it will also lead to a mass exit from the Emissions Trading Scheme as the industry will no longer view it as a safe investment.

International Climate Change Negotiations Minister Tim Groser says the Government has not yet decided if it will commit to the agreement.

Christopher Booker: You Can’t Have Shale Gas – It Might Halve Your Bills
http://thegwpf.org/opinion-pros-a-cons/ ... bills.html

One of the more remarkable things happening in the world at the moment is the revolution being brought about in the US energy market by cheap shale gas. In four years this has halved the cost of gas, saving US energy users an estimated $100 billion. Thanks to the growing switch from coal to less carbon-intensive gas, US “carbon emissions”, for what it’s worth, have also plummeted to their lowest level in 20 years.

In Britain, thanks to the utter incompetence of those in charge of our energy policy, the opposite has happened. The rising cost of imported gas has led our electricity companies to switch back to coal, which in the past two weeks has been contributing up to 40 per cent or more of our power. More than once, however, the contribution from all our 3,500 wind turbines put together has been as little as 0.2 per cent, with coal-fired power stations contributing 200 times as much.

As for that shale gas, of which we also have huge reserves, our Government seems to do all it can to discourage it. This is because it is just another fossil fuel, which won’t help us meet our (wholly unachievable) EU target of generating 32 per cent of our electricity, by 2020, from “renewables” – such as those useless windmills. So our energy bills continue to soar and, with half our coal-fired power stations due to close under an EU directive, the prospect of Britain’s lights going out and computers closing down gets nearer by the month. Has there ever been, in our country’s history, a madder flight from reality?

Fix the Mess for Cheaper Electricity

We are told that the carbon tax will allow the market to determine how to best reduce the use of carbon fuels.

But we still have a thicket of bureaucratic rules, subsidies and mandates driving up the cost of electricity. This is not the market reacting to a simple tax – it is a costly mess.

If politicians were honest about reducing costs for Australian households and tax payers, four steps are required:

First, abolish all rules forcing electricity retailers to buy a mandated percentage of their power from expensive and unreliable sources such as wind and solar.

Second, abolish all rules forcing electricity retailers and consumers to pay above market prices for green energy, whether they want it or not.

Third, abolish the carbon tax and all the subsidies, compensation, exemptions and compliance costs associated with it. This money merry-go-round increases costs and taxes and achieves nothing useful.

Finally, boycott those shameless electricity retailers who have actively spread the green energy myths knowing that this will increase electricity prices while simultaneously requiring more gas back-up, thus benefitting their own gas interests.

- Viv Forbes

Of lies, damned lies and delusion
http://www.canberratimes.com.au/opinion ... 20ofs.html

The thought of Julia Gillard lecturing to the world at the G20 in Mexico on Labor’s economic record lives in the space between skin-creepingly embarrassing and delusional. Under Labor we have had the four biggest deficits in this nation’s history, the highest debt, and three extensions of our nation’s credit limit as we continually max it out.

Once more Ms Gillard and Mr Swan are claiming responsibility for the events of the Permian and Precambrian periods when the coal deposits of Australia were laid down around 300 million years ago and iron ore deposits were formed around 600 million years ago.

These two substances, one made up of that evil substance carbon, and the other responsible for abundant carbon dioxide emissions as it is turned into steel, gave us a role to play in China’s boom as prices for coking coal went from around $50 per tonne to $300 per tonne and iron ore went from $40 per tonne to more than $160 per tonne.

If Julia Gillard was honest about our luck in recent years then she should have given a lecture on geology and geography not on economics. We have a $231 billion gross debt. Ours is the third fastest proportionate increase in global public sector debt since 2007, as found by Dr Ken Rogoff of Harvard. Only Iceland and Ireland beat us.

After decades of mismanagement from the Queensland Labor Party, Queensland's debt is heading towards $100 billion. That makes the average Queenslander's share of Commonwealth and State debts $32,000. Greece's debt at the moment is $41,000 per person.

We have very little to brag about on government management of the bountiful harvest which is, maybe was, the mining boom.

Labor’s latest foray into their key policy objective of closing things down can now be seen in the oceans of our coast. It is perplexing when trying to go beyond the usual roll out of the rhetoric of imminent environmental destruction to find exactly what they believe is a problem.

Australia extracts less than 30 kilograms of fish per square kilometre from our ocean territory, compared to a global average of 755 kilograms per square kilometre. We are an island continent surrounded by fishing grounds but we now import 72% of our seafood as we close down our capacity to feed ourselves.

We get most of our fish from Thailand, China and Vietnam, and all of these countries extract more than 5,000 kilograms per square kilometre, around 200 times our rate of extraction.

Try and buy a fish caught in Australian waters, you will be searching, and now it is going to become even harder.

So it is evil to sustainably log our forest but we have no problem importing timber from other countries that clear fell theirs? In net terms, we import around $2 billion of wood and timber products each year. So each year we need to put $2 billion of products on a boat to send in the other direction to fund this.

We appear to believe irrigation in the Murray-Darling is wrong but subsidised European food is right. Australian coal burnt in Australia to keep our power prices down will destroy the world but if you burn it in Beijing it is miraculously cleansed of its environmental sins, you might even get a carbon credit for it.

The theme of this government is becoming clear; if it is open, shut it; if it is saved, spend it and if it is not saved borrow it. Don’t grow or make anything that you could import, and if there are things you are good at then dream up dopey taxes so that you stop growing or making them.

So a more honest appraisal by Ms Gillard at the G20, of the graces and acumen of her government, would be a truly riveting speech, but not one that would gather her many accolades. It would be a speech that starts with the removal of a popularly elected Prime Minister, followed up with a massive broken promise to the electorate, then stumbles along with a circus of fiascos. It finishes with a massive debt and some bizarre belief in a domestic climate control policy legislated by the Australian Government and administered by the Australian Taxation Office.

Barnaby Joyce is the Nationals' Senate Leader: Canberra Times Column - Of lies, damned lies and delusion

Most Britons No Longer Believe Climate Change Is Man-Made
The Sunday Times, 24 June 2012

Less than half the public believe climate change is man-made, according to a new poll. The YouGov survey for The Sunday Times reveals just 43% think human activity is making the world warmer. This compares with 55% when the same question was asked in 2008. The number who believe the world is not becoming warmer has risen from 7% to 15%.

In just two weeks Aussie families will be slugged with a carbon tax to pay for a ‘green utopia’.

But where is this money really going? And are our carbon tax bureaucrats practicing what they preach?

We did a little digging, and discovered what many long suspected: While Aussie families are struggling, bureaucrats are living the high life and travelling to exotic destinations at our expense.

Documents released to the Australian Taxpayers’ Alliance under Freedom of Information laws revealed that bureaucrats in the Department of Climate change flew 6,528,616km last financial year, costing us a staggering $3,274,286.40!

And while these very people are lecturing us to act like we’re back in the dark ages the carbon emissions of these flights equal over 1000 tonnes!

The hypocrisy is staggering – it’s one rule for them, and another rule for us. No wonder they are happy to slug airlines with the carbon tax – they don’t have to pay the bill!

So where were they flying to?

None other than the holiday resorts of Cancun, Vanuatu, Maiami, Fiji, The Maldives, Grenada, Maimi, Barcelona… Must be tough having to travel to places like the Caribbean & South Pacific all the time!

The actions of Department staff make one thing clear: the carbon tax isn’t about the environment, it’s about squeezing taxpayers for their own benefit.

And of course, it’s only the best in luxury travel for our bureaucrats – no expense is spared! Many of these flights cost the taxpayers up to ten times what an online economy class ticket would cost.

A round trip from Sydney to Bali cost for one person $15,311!!!!! I had a look on Jetstar just now, and you could get economy flight for under $700! Then there’s the flight to Seaul ($15,688.57), Thailand ($13,093.74pp for two people), Chile ($12,805.46)…

And this doesn’t even include accommodation: From $21,115.69 for a 5 star hotel in Thailand to the whopping $265,000 for the delegation in Durban.

We asked who took these flights, but they refused to answer. It is no wonder that the department of climate change refused to reveal who took these flights – I’d be ashamed too if this was found out. We shall be appealing this decision, because the Australian public has a right to know whose holidays they are paying for!

This is just the first tranche of a series of documents we received under Freedom of Information laws, and thank you to everyone whose donation made this possible (we were charged over $750!) We shall be releasing further data discovered about waste and misuse of taxpayer funds soon.

Please make sure everyone knows the truth so we can AXE THIS TAX!

Timothy Andrews
Executive Director
Australian Taxpayers’ Alliance

Peter Foster: The ‘Sustainability’ Farce Hatched By A Cabal Of Ardent Socialists
Financial Post, 8 June 2012

The Rio+20 Earth Summit on Sustainable Development, which starts in two weeks, will be a farce, even if everybody keeps a straight face. The grand UN-based system conceived to co-ordinate the activities of all mankind has proved utterly unsustainable, a dysfunctional mess that generates nothing but endless meetings, agendas and reports.

That sustainable development would inevitably collapse under its own contradictions was inevitable. What is fascinating is why every country on Earth — including Canada — would earnestly have committed to a concept hatched by a cabal of ardent socialists. Equally fascinating is the almost universal reluctance to acknowledge the organizational disaster that has ensued.

A spokeswoman for the Department of Foreign Affairs and International Trade declared that the “composition of the Canadian delegation” was “still under consideration,” although apparently Environment Minister Peter Kent will be going, as will Quebec Premier Jean Charest. When I asked the spokeswoman for background information on Canada’s approach to Rio+20, she suggested that I file an access to information request. Doesn’t sound very transparent (a key tenet of sustainability), but then the federal government’s position does appear a little conflicted.

Since one of sustainable development’s key objectives is to kill the fossil fuel industry, it hardly seems to fit the Conservatives’ promotion of Canada as an oil and gas superpower. Equally, Ottawa’s decision to streamline environmental regulation goes entirely against sustainability’s thrust of increasingly comprehensive consultation. As for the even more controversial move to tighten up — that is, apply the existing tax rules to — the political activities of foreign-funded environmental “charities,” how does that fit with the Harper government’s solemn commitment, in its submission to Rio+20 summit, to promote the involvement of the very same non-governmental organizations? Welcome to sustainable development’s world of devious ideological purpose, ridiculous bureaucratic pretension, bogus “civil society” and political hypocrisy.

The phrase “sustainable development” first achieved wide currency as the result of the 1987 report of the United Nations’ Brundtland commission, a body of self-styled “eminent persons” who appointed themselves to prepare “a global agenda for change” in the face of the alleged “interlocking crises” of failing economic development and deteriorating environment.

Behind Brundtland’s seemingly reasonable definition of sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” lay the implication that free markets were unsustainable.

Sustainable development was rooted in projections of environmental apocalypse due to catastrophic man-made global warming, species extinction, resource depletion, and any number of other apocalyptic scenarios that would be brought about by unfettered capitalism.

What was needed to fix this (projected) mess was greater political oversight and control, which would delicately balance the triple bottom line of the economy, the environment and social issues. As Brundtland commissioner Maurice Strong, who orchestrated the 1992 Rio conference, declared: “[W]e must devise a new approach to co-operative management of the entire system of issues.” As for the impossibility of either gauging or fulfilling “needs,” that wasn’t a problem for the Brundtland gang. They would simply tell us what our needs should be.

So how is the dream looking after 20 years?

Rio+20’s “themes” are “Green economy in the context of poverty eradication and sustainable development” and “The institutional framework for sustainable development governance.” Green economies, which are everywhere based on unsustainable subsidy and dead-end technologies, are stumbling throughout the world, but the more intriguing theme is that “institutional framework.”

The descent of UN master plans into abject confusion was acknowledged in a widely unread 2008 report from the UN’s Joint Inspection Unit. The report noted that the ramshackle sustainable governance “framework” had at least three interrelated masters, the United Nations Environment Program (UNEP), which had been set up after the UN’s 1972 conference in Stockholm, the Commission on Sustainable Development (CSD), which had been created after Rio in 1992, and the UN’s Economic and Social Council (ECOSOC), to which the CSD theoretically reported.

The report found these bureaucracies to be disconnected from ever-proliferating UN secretariats formed to deal with ever-multiplying multinational environmental agreements. Indeed, nobody had a handle on just how many programs, projects and organizations there were within the UN’s exploding universe. It ran into the hundreds. The Joint Inspection Unit suggested that a basic inventory might be a good idea.

The report also found that this unwieldy system, which was meant to impose a godlike “balance,” contained no mechanism for assessing whether the environmental benefits of agreements were actually greater than the costs of their implementation. What this unco-ordinated hydra-headed UN/NGO monster was good at, however, was producing an endless stream of voluminous reports and studies. Unlike the organizational mess, these reports stressed a number of relatively consistent, albeit unworkable, themes, all of which pointed — once you penetrated the Orwellian verbiage — to a comprehensive power grab under the guise of averting environmental disaster.

One key theme was that national governments had to sacrifice sovereignty and give more power to radical NGOs (who had been eagerly promoted — and allowed into the UN process — as the voice of “civil society” by the Brundtland gang and their fellow travellers at nodes such as the World Economic Forum). Another was that the UN needed an independent source of income, perhaps via a Tobin tax on financial transactions.

Yet another was that the International Financial Institutions, primarily the World Bank, should be pressured both to withhold funds from fossil fuel development, even though fossil fuel development was essential to poverty alleviation, which was meant to be one of sustainability’s twin objectives.

Another constant was calls for more money and bigger bureaucracy. The latest is a World Environmental Organization. Fortunately, some countries are resisting, among them Canada. Nevertheless, Canada is firmly embedded in the sustainability charade.

Starting in 1997, all federal departments had to table sustainable-development strategies every three years. A Commissioner of the Environment and Sustainable Development was created within the Office of the Auditor-General. It was inevitable that the commissioner’s reports would be sharply critical of the government’s move toward sustainability, because nobody was quite sure in which direction it lay.

Year after year, commissioners’ reports were critical of governments’ planning and reporting for sustainability (which, ironically, was all about planning and reporting). They cited a lack of clearly defined priorities, metrics, targets, accountability and leadership, as well as failure to achieve other bureaucratic buzz concepts such as “horizontal integration across departments” and strategies that would be “drivers of change.” The thorniest issue was climate change.

A 2006 report by commissioner Johanne Gélinas was useful to the Harper Conservatives because it exposed that the previous Liberal government had spent billions to achieve zero impact on climate. Not that the Harper government wanted to “achieve” too much either, since sustainable “achievement” tended to be both climatically pointless and economically destructive. Earlier this year, the commissioner again castigated the Conservatives for having no clear plans to meet their modified carbon dioxide reduction targets by 2020.

Meanwhile, in 2008, after 11 years of sustainably treading water, a Federal Sustainable Development Act was passed (with all-party support), calling for a Federal Sustainable Development Strategy (FSDS). You know, the thing that was meant to have been introduced in 1997, and which had since produced nothing but a digital mountain of departmental reports.

The first FSDS was tabled in October 2010. The impossible dream would be carried forth on yet another wave of good intention and verbiage, “An integrated, whole-of-government picture of actions and results.” Priority themes included addressing climate change, “Protecting Nature,” and “Shrinking the Environmental Footprint — Beginning with Government.”

The first objective was impossible except within a multinational framework (which had collapsed. The Harper government has also now withdrawn from Kyoto). The second theme was ridiculously vague: What is “Nature?” The third embraced one of the key concepts of green socialism, the environmental or ecological “footprint,” whose star performer is, according to the WWF, Communist Cuba.

Canada’s “national submission” to the Rio conference is yet another model of bureaucratic pretension and political hypocrisy, in which an ostensibly right-wing government calls for more comprehensive and effective progress toward the socialist dreams of Brundtland and Rio ’92.

Although it opposes the creation of a World Environmental Organization, the submission — which one doubts any government minister has ever skimmed — appears infinitely amenable to sprucing up dysfunctional UN organizations such as UNEP and ECOSOC to pursue “more focused” agendas within “more streamlined” and “integrated” formats. It suggests institutional reforms to embed sustainable development even more deeply into UN processes, programs and partnerships, although only in a co-ordinated, coherent, whole-of-government sort of way.

It’s time for that little boy in the crowd to state the obvious. The sustainable Emperor has no clothes.

Gillard faces revolt on economy
By Greg Ansley

Life is not so sweet now for Australian Prime Minister Julia Gillard, who is facing popular rebellion. Photo / AP Australian Prime Minister Julia Gillard faces popular rebellion on key economic policies that could prompt their reversal if Labor loses power in the next election.

This includes the carbon tax due to begin on July 1 and its later evolution to an emissions trading scheme, and increasing foreign investment in mining and agricultural land, especially from China.

The latest annual Lowy Institute poll also shows Australians place little faith in the Government's economic management, believing instead the minerals boom saved the nation from recession.

The poll's findings on climate change policies present the most urgent issue for Gillard.

The Opposition has maintained an unrelenting attack on the carbon tax - warning of soaring increases in business and household costs - and has promised to repeal it if they defeat Labor.

Gillard has struggled with the policy since she backflipped on earlier campaign promises and announced its introduction after the formation of her minority Government in 2010.

The Lowy poll said that Australians were softening their views on measures to fight global warming, with support for urgent and strong policies falling from two-thirds to 36 per cent in the past six years.

The strongest support, of 45 per cent, now lies with an "intermediate" approach that acknowledges the need to address climate change, but through gradual, low-cost options.

The poll said 63 per cent of Australians opposed a fixed carbon price leading to an ETS, with more than half believing it would cost jobs, and 38 per cent saying it was not necessary to act before other countries.

One-third opposed the move because it did not go far enough and lacked measures strict enough to substantially reduce emissions.

Opinion is fairly evenly divided on the Opposition's promise to repeal the legislation - but the 38 per cent who support its removal cross all states, age groups, income levels and both genders, with significant support from Greens voters.

Nor has the Government sold its economic credentials to voters.

The poll said 70 per cent said Australia managed to avoid falling into recession because of demand for resources from countries such as China, rather than astute Government management.

But more than half believe the Government is allowing too much Chinese investment.

It said the two greatest reservations were fears for the future control of crucial mining and agricultural assets. The poll said 81 per cent of Australians opposed the sale of farmland to foreigners.

But most support Labor's controversial new short-term migration agreements allowing miners to import skilled workers to fill gaps in the local workforce.

The poll said 62 per cent favoured admitting extra workers when "there are shortages of workers in Australia and companies in Australia cannot find enough skilled workers".

Spain Ejects Clean-Power Industry With Europe Precedent: Energy
By Alex Morales and Ben Sills on May 30, 2012
Bloomberg: http://www.businessweek.com/printer/art ... =bloomberg

Spanish renewable-energy companies that once got Europe’s biggest subsidies are deserting the nation after the government shut off aid, pushing project developers and equipment-makers to work abroad or perish.

From wind-turbine maker Gamesa Corp. Tecnologica SA (GAM) to solar park developer T-Solar Global SA, companies are locked out of their home market for new business. These are the same suppliers that spearheaded more than $69 billion of wind and solar projects since 2004 that today supply more than 50 percent of Spain’s power demand on the most breezy and sunny days.

Saddled with a budget deficit more than twice the European Union limit and a ballooning gap between income and costs in its power system, Spain halted subsidies for new renewable-energy projects in January. The surprise move by Prime Minister Mariano Rajoy one month after taking office helped pierce investor confidence in stable aid for clean energy across Europe.

“They destroyed the Spanish market overnight with the moratorium,” European Wind Energy Association Chief Executive Officer Christian Kjaer said in an interview. “The wider implication of this is that if Spanish politicians can do that, probably most European politicians can do that.”

Spain’s $69 billion of investment in power capacity from 2004 to 2011 was about triple the spending per capita in the U.S. in that period, according to Bloomberg New Energy Finance data and U.S. Census Bureau population estimates. Most of the 2012-2013 spending will be for the legacy of projects approved before the aid cuts to wind, solar, biomass and co-generation.

Next Step
Industry Minister Jose Manuel Soria, who is preparing a wholesale redesign of the pricing for Spain’s regulated energy industry, described the January move as a “first step.” The nation’s energy regulator in March suggested scaling back incentives for solar thermal plants. The government also may impose temporary taxes or caps on renewable plants, Standard & Poor’s said in February. Soria’s plan may be released by the end of June.

Investment in solar photovoltaic alone is headed to skid to as little as $107 million in 2013 from $879 million this year and $1.5 billion last year, New Energy Finance estimated. For new wind projects, investment should plunge to $963 million in 2013 and $244 million in 2014 from $2 billion this year.

T-Solar’s Experience
T-Solar, which became the world’s biggest solar-farm operator by leveraging its Spanish business, currently has more than 40 running in Spain, Italy and India. While it still makes solar panels in Orense, Spain, they’re bound for Peru.

“We have an important pipeline of projects, and it’s 100 percent outside Spain right now,” T-Solar Managing Director Juan Laso, who also heads the country’s photovoltaic power association, said in a telephone interview. “If you take such a brutal measure, what you do is oblige the industry to move out,” he said of the January moratorium.

Solaria Energia y Medio Ambiente SA (SLR), a Madrid-based solar panel maker, slumped as much as 19 percent today and traded 11 percent lower at 33 euro cents a share at 3:13 p.m. in Madrid after restating its 2011 earnings. The company lost 96 million euros last year compared with a 6.5 million-euro profit in 2010.

Gamesa, the world’s fourth-biggest wind-turbine maker by market share according to Navigant Consulting Inc. (NCI) (NCI)’s BTM Consult unit, plans to reduce the factory output of its Spanish plants to 1,000 megawatts by 2013 from 1,200 megawatts at the end of last year.

Gamesa’s Loss
Instead, Zamudio-based Gamesa is adding capacity in India where it plans to open a third factory this year. In 2011, the company got less than 9 percent of its revenue in its home nation, down from almost 33 percent in 2009. Former CEO Jorge Calvet didn’t mention Spain on a May 10 call with analysts after announcing the company’s first quarterly loss.

“The future is outside of Spain,” said Sean McLoughlin, clean energy analyst at HSBC Bank Plc in London. “Gamesa already moved most of their business out of Spain and the moratorium only helps to accelerate and complete that process.”

Thirty-one years ago, Spain erected its first wind turbine at Tarifa, a city on the peninsula’s southern tip that juts into the gusty Straits of Gibraltar which divide Spain from Morocco.

German Model
In the 2000s, Spain copied the German clean-power aid model, as did nations from Portugal to Israel and Japan, increasing subsidies to a pinnacle in 2007. That’s when a law granted 444 euros ($556) a megawatt-hour for home rooftop solar panels feeding the power grid, compared with an average 39 euros paid to competing coal- or gas-fired power plants.

By 2009, the consumer bill for clean-energy aid had risen to 6 billion euros a year, ahead of the 5.6 billion euros in Germany, whose economy is almost four times bigger, according to the Council of European Energy Regulators.

After four successive reductions in subsidies since then, the government on Jan. 27 this year announced the moratorium on aid for new projects. The next month Spain saw itself drop out of the 10 most attractive markets for renewable-energy investors for the first time, due to reduced aid, on an Ernst & Young ranking. Spain led the list from October 2003 through July 2006.

Start of Decline
“What happened in Spain is that abruptly, they changed the industry by changing the policy, and that doesn’t help build a sustainable industry,” said Stephan Ritter, general manager of General Electric Co.’s European renewables unit.

“The history of Spanish wind energy policy is ‘We’re going to keep it stable’ and suddenly out of the blue this comes, and it’s a bomb,” the EWEA’s Kjaer said.

The decline started before this year. The 75,466 renewable energy jobs that existed in Spain at the industry’s peak in 2008 shrank to 54,925 in 2010, according to the Renewable Energy Producers Association’s most recent data. Including indirect jobs, the tally slumped from 131,229 to 111,455.

Iberdrola SA (IBE), based in Bilbao, became the world’s biggest owner of wind farms, taking its Spanish experience abroad over the past decade. It campaigned for solar subsidies to be ended, because much of the power-tariff deficit sits on the utilities’ balance sheets straining their finances. Iberdrola, which also runs gas, hydro and nuclear plants, is Spain’s biggest utility.

Solar Drag
Solar energy was the biggest drag on the system, accounting for almost half of the annual 6 billion euros of liabilities and producing just above 2 percent of the power, said Eduardo Tabbush, an analyst in London at Bloomberg New Energy Finance.

With peak electricity demand at less than half of capacity, the country doesn’t need more power plants, he said. Spain has a capacity of 99 gigawatts, and peak demand of 44 gigawatts.

Spain’s power-system debt swelled to 23 billion euros as successive governments set electricity prices for consumers that didn’t cover the revenue utilities booked. Even with January’s moratorium, the electricity system racked up another 762 million euros of debt in the first two months of the year, according to the energy regulator.

“You’re making renewables a scapegoat for a problem that was created as a result of incredibly bad policies,” said Kjaer.

World Ranking
Spain is the world’s fourth-biggest wind energy market by cumulative installed capacity, and in solar photovoltaic power, it ties the U.S. for fourth, according to data compiled by Bloomberg. The nation installed at least a gigawatt of wind power capacity every year since 2001, peaking at 3.5 gigawatts in 2007, according to the Spanish Wind Energy Association.

“At the moment there’s not a single project planned for 2013,” Heikki Willstedt, director of energy policy at the Spanish Wind Energy Association, said in an interview. “We have to keep a rhythm of installation over the next two or three years to keep the industry here in Spain.”

Solar power installations have been bumpier, totaling 550 megawatts, 2,760 megawatts, 70 megawatts, 390 megawatts and 430 megawatts for the five years through 2011, according to Bloomberg New Energy Finance data.

Even before the moratorium was established, opportunities were dimming for renewable power in Spain. The so-called pre- registry of wind projects, which had been approved to receive above-market electricity prices, was set to expire at the end of 2012. And a retroactive cap was set on the number of hours when solar generators can earn higher rates.

Acciona, Abengoa
Acciona SA (ANA), a developer of wind and solar projects that in 2011 derived more than three quarters of electricity sales in Spain, has less than half of its pipeline of new projects for 2012 in Spain. Energias de Portugal SA’s renewables division, based in Spain, has less than a fifth of its pipeline there.

At Abengoa SA (ABG), the portion of revenue from Spain fell to 27 percent last year from 39 percent in 2007. Abengoa has 1,210 megawatts of solar thermal plants either in construction or in a pre-construction phase, a third of it in Spain.

“It reaches a point where if more interesting markets open up and you have to export to those markets, many times it’s better to take the factories there,” said Willstedt. “All of this know-how could be lost quickly, or it’ll move away, or it could be bought by competitors.”

In a country where unemployment in April rose to 24.4 percent, the subsidy moratorium puts more positions at stake, according to Willstedt.

’Five Years on Ice’
In its March 30 budget, Spanish Premier Rajoy’s government gave no sign of when it would bring back subsidies, and the National Energy Commission, an advisory body, has published scenarios including a suspension until 2017.

“I don’t know any sector that can be put on ice for 5 years and then be taken out intact,” said T-Solar’s Laso.

Abengoa Chief Executive Officer Manuel Sanchez Ortega said Feb. 28 in an interview he thought the moratorium would last 18 months at the most.

“Then the industry will pick up the pace again,” Ortega said. “If it lasts more than 18 months we are running the serious risk of driving all this industry out of the country.”

To be sure, Spain is headed to meet its European Union target of getting 20 percent of all its energy from renewables by 2020. The country generated 23 percent of its electricity from renewable sources in 2010.

Spain’s wind association says wind power in April covered 25 percent of electricity demand, a record that saved 270 million euros in fossil fuel imports. At one point on April 19, wind covered 61 percent of power demand.

The loss of subsidies has diminished the appetite of banks to finance renewables projects, said Laso and Kjaer. Even as Spanish companies seek markets abroad, Spain’s policy may now weigh on the viability of projects in other parts of Europe, said Kjaer.

“Banks will think ‘maybe we should attach more risk premium if we lend to projects in other parts of Europe’ and that’s the devastating effect of the way it has been done,” said Kjaer.

Green Energy Transition: Germany Fears De-Industrialisation
Handelsblatt, 23 May 2012

As a result of Germany's green energy transition, electricity prices are exploding. Consumers and businesses are paying the price while Germany faces gradual de-industrialisation. Economists estimate that the cost of the green energy transition will total 170 billion Euros by 2020. This is more than double of what Germany would have to write off if Greece were to withdraw from the monetary union.

In June 2011, Angela Merkel said: "German companies just as citizens of Germany have to be supplied with affordable electricity, also in the future."

Today it is obvious that Merkel has promised too much. Energy prices in Germany are increasing dramatically - by 57 percent in just the past ten years - and not least because the state is one of the biggest drivers of cost. Taxes and duties on electricity prices have now risen to 23.7 billion Euros p.a. - an increase of just over 1,000 percent within 15 years. The levies on electricity look more like a special energy tax, which is higher than the revenue from tobacco and motor vehicle taxes combined.

This figure is the result of an electricity price analysis by the Federal Association of Energy and Water Industry (BDEW). It should have been a wakeup call for the Chancellor who met with the Prime Ministers of the German states in the Chancellery this week to discuss the green energy transition. The results of the meeting were meagre: the Federal Government and state governments will work together more closely in the future. Merkel announced that summit meetings will be held every six months.

"The green energy transition is a big task to which we are committed together," said the Chancellor. A Federal network planning law to expand the electricity grid should be agreed before the summer break and adopted by the end of the year.

According to Merkel, it was also agreed to harmonise the further expansion of renewable energy “with the need for base-load capable power plants." The Federal Government will soon make a suggestion towards this goal. The Chancellor also expressed the hope that there would be an agreement in the mediation process for the energy renovation of buildings and the planned cuts in solar subsidies by the government until the summer.

For industry and consumers, this is only a small consolation. Experts agree that renewables subsidies must be cut quickly. The promotion of renewable energy has become the largest single item of green taxes and levies. This year, the subsidies will increase to the highest ever annual figure of 14.1 billion Euros.

German industry, in particular, is suffering from high electricity prices. Most affected are the chemical, metal and paper industries. In the aluminium industry, the electricity costs amount to about 40 percent of total costs.

All industries complain; some companies have already closed down: the aluminium smelter Voerdal in the Lower Rhine town of Voerde recently filed for bankruptcy because of high energy prices. The U.S. chemical giant Dow Chemical currently operates 17 plants with more than 5,000 employees in Germany. "Because of the green energy transition I get increasingly critical questions from our corporate headquarters in the US about whether energy supply in Germany is still possible at competitive prices," said Germany boss Ralf Brinkmann.

Germany's de-industrialization has already begun

"The de-industrialization has already begun," Energy Commissioner Guenther Oettinger has warned in an interview with the Handelsblatt. Hans Jürgen Kerkhoff, President of the Steel Trade Association, complains: "The levels of industrial electricity prices are higher here than in most other countries."

Within the Federal Government, the concerns are growing: "The price of electricity has become the Achilles’ heel of the energy revolution. We must design it in such a way that electricity prices remain affordable," says Thomas Bareiß, energy policy coordinator of the Parliamentary Christian Democrats (CDU). Experts estimate that the cost of the green energy transition will total 170 billion Euros by 2020. This is more than double of what Germany would have to write off if Greece were to withdraw from the monetary union.

What is of particular concern is that Germany’s industry has helped the country to more economic growth compared to other countries during the recent years of crisis. Countries such as Britain envy Germany for the 22 percent share of industry in its GDP.

Therefore, policy makers face a dilemma. On the one hand, industry has to be relieved from energy costs in order not to jeopardize its international competitiveness, says CDU expert Thomas Bareiss. On the other hand, the burden should not unilaterally end up with households. "The only solution is to make the green energy transition as cost effective as possible," says the conservative politician. In this context, he criticised the federal states that had recently rejected a cut in solar subsidies by a two-thirds majority.

At the Chancellor’s energy meeting with the prime ministers of the German states, the issue of electricity prices will be high on the agenda. Merkel initially only wanted to talk about the expansion of the national grid. Maybe she did not want to be reminded of her promise from last June that the price of electricity would be affordable for industry and consumers.

Yet, the figures tell a different story. At the beginning of the liberalisation of the electricity market in 1998, government taxes and levies for all electricity consumers amounted to 2.28 billion Euros. In 2012 the figure is about ten times as high. The 14.1 billion in subsidies for the promotion of renewable energy is also the single largest item of government taxes and levies on electricity.

Taxes and levies already make up 45 percent of the electricity bill of an average private household with three people. The average household is charged 75 Euros per month, of which only 41 Euro are derived from the procurement, transportation and distribution of electricity, i.e. the actual service. 34 Euros are taxes and duties.

The tenfold increase in taxes represents only the beginning of a trend that will further accelerate significantly in the opinion of many experts. The reason: the green energy transition. If the Federal Government wants to achieve its ambitious goals, it will have to redistribute a lot of money, which it has collected from consumers. The share of renewable energy in electricity generation is supposed to increase from currently 20 percent to 35 percent by 2020 and to 50 percent by 2030.

That will incur additional costs. There are now a number of calculations and scenarios on the subject. In a report presented in early May, the management consultancy McKinsey comes to the conclusion that the total cost of the green energy transition will amount up to 175 billion Euros between 2011 and 2020. In 2020, Germany’s electricity consumers would have to bear costs of 21.5 billion Euros, costs that are caused entirely by the switch to renewable energy.

Leaked Strategy Paper: EU Plans To Phase Out Green Energy Subsidies
Hendrik Kafsack

The economic cost of the expansion of renewable energy could become prohibitively expensive. Subsidies in the EU for solar and wind power should be phased out as quickly as possible. That is what the European Commission says in an internal draft strategy paper that EU Energy Commissioner, Gunther Oettinger, will present in Brussels early next month.

In doing so, the EU Commission is supporting the German government which wants to reduce solar subsidies by up to 30 percent, a plan which has met with resistance in the Upper House of the German Parliament.

The expansion and especially the maturity of renewable energy such as solar and wind power have grown much faster than expected, the strategy paper points out. The cost of photovoltaic systems, for instance, had fallen by 48 percent in the last five years. The cost for the construction of offshore wind farms had decreased by 12 percent since 2008. In light of these developments, member states would have to make their programmes more flexible to phase them out.

At the expense of taxpayers

If green subsidy programmes are too rigid, there is a risk that producers would be over-compensated and the cost of developing renewable energy would become intolerable, the paper warns. The sharp decline in the cost of many new green energy sources together with the strong expansion of solar and wind energy had driven the cost for consumers and, in some cases, for taxpayers sharply higher. For many people, energy costs were already too high, especially in light of the difficult economic situation today. The price for renewable energy such as solar and wind power would therefore have to be left entirely to the forces of the free market and as quickly as possible.

However, the Commission does not intend to abolish all forms of renewable subsidies. The development of newer green energy sources, such as geothermal or novel solar thermal power plants, that are not yet commercially viable should be encouraged even beyond the year 2020.

Harmonisation of green subsidies among member states

In its strategy paper, the Commission also calls for the harmonisation of national subsidy and support programmes. The Commission has been criticising the coexistence of different support systems for some time. This discrepancy has led to the inefficient use of renewable energy within the EU given that they have often been developed in countries where they are simply inappropriate. Instead of subsidising the expansion of solar energy in Northern Europe, for example, the Commission wants these nations to finance their expansion in sunny countries like Greece. The paper specifically mentions the so-called Helios Project in Greece. Energy generated in such projects could then be counted towards the renewable targets which Northern Europeans have signed up.

Until now, the German government has opposed any such Europe-wide plan because it would put in question Germany’s Renewable Energy Law (EEG) in which the feed-in tariff for renewable energy is set out. Not a single German party is currently prepared to agree to such a plan.

Translation Benny Peiser
Frankfurter Allgemeine Zeitung, 19 May 2012

Icecap Note: The administration and the media in the pockets of the environmental extremists ignore the realities of the major problems in Europe with Green energy...one of the reasons for economic turmoil there. The Obama administration used initially Spain as the model for green economy with its heavy subsidy of wind and solar. The subsidies of these inefficient sources drove up energy costs so much that industry relocated its factories to India and China and unemployment soared to a world high 25.5%. Not a single fossil fuel plant could be closed because energy from them was needed to maintain power and CO2 emissions INCREASED 50% because they were being used in less efficient back up mode. A similar situation was found in Denmark, Italy, the UK and Germany although Germany came to its senses and is building fossil fuel plants and France built nuclear power. The UK’s new energy minister has a much more balanced view on energy sources than the extremist Chris Huhne. Energy costs have skyrocketed in the UK and over 25% of the households in Wales are in energy poverty.